by Eamon Javers
Although much of business life these days is conducted by phone and e-mail—which are not easy surveillance targets—Nick remains convinced that when a lot of money is changing hands, people still meet face-to-face. And when they do, he’s ready to document it all. “That’s the advantage we have as ex-military operators,” he says. In the case of the three banks, “We had a guy who was able to swim forty meters to the island where the subject’s house was and have a look.” Once there, Nick’s man dug a hole in the ground just outside the banker’s house—and lived in it for days while he watched everything that went on. In the end, Nick’s team discovered that Bank Two was conducting talks with Bank Three, and tipped the client off to the deception.
If such spying can save a company millions of dollars, executives reason, it more than justifies the tens of thousands of dollars paid to uncover the information. And if a banker on the other side of a deal objects to having former soldiers from the British special forces living in holes in his backyard, so what? It’s nothing personal. It’s just business.
NOT EVERYONE IN the surveillance industry is as low-profile as Nick No-Name. Another British operative, Emma Shaw, works in an unremarkable office complex in the bedroom community of Old Woking, in Surrey, about half an hour from London by fast train. The other tenants in the complex are small businesses, accountants, and one-man consulting shops. Emma Shaw’s office has the atmosphere of a suburban dentist’s office, and she herself doesn’t look anything like a secret agent—but that’s the point. A veteran intelligence operative, Shaw appears youthful, spending a casual Friday in her office clad in a pink Abercrombie and Fitch sweat top and fashionable jeans. Her blond hair has highlights, and she’s got high cheekbones, giving her an athletic appearance. She looks like a young mom on her way to football practice.
But Emma Shaw is the real deal, as well trained as Nick No-Name, though with a different business philosophy. Shaw feels that surveillance is a legitimate part of the business process and that surveillance operators like her shouldn’t hide in the shadows. Her office has a sign on the front door. Her company, “esoteric,” has a Web site (www.esotericltd.com), and she hands out slick marketing materials detailing her services, with the tagline: “A specialist security and covert investigations company.”
Shaw is a manager now, and doesn’t do much actual snooping herself, so she’s less concerned than Nick No-Name about her identity becoming public. It’s not bad for her career, and in the right context, publicity may even help. She lays down one condition, though: she won’t discuss the exact details of surveillance techniques she uses on behalf of her corporate clients. They’re by and large the same techniques used to this day by the British intelligence service MI5 and by British military intelligence. Providing too detailed a description, she fears, could give vital intelligence to the terrorists who are trying to elude British intelligence every day.
Emma Shaw was born in Yorkshire, the coastal county in northern England, and at age eighteen joined the army, where she was assigned to the military police. As a teenager in the army, she learned the basics of overt investigations, and then moved on to undercover missions, helping the top brass work against drug use among British forces. She tailed suspects, posed as a regular soldier, and helped support police investigations of soldiers suspected of smuggling or selling drugs. Shaw found her picture on the front pages of newspapers across Britain. But by that time she’d left the unit, so her undercover status wasn’t compromised by the publicity.
Next assigned to Northern Ireland, she served in a garrison township outside Belfast in 1993 and 1994. There, she did undercover intelligence work, but she’s vague about what it entailed—saying only that it “related to the problems of the time.” And at that time there were problems aplenty for the British army in Northern Ireland. Shaw’s job was to support the Royal Ulster Constabulary (RUC), the largely Protestant police force that patrolled a land bitterly divided between Protestants and Catholics.
After Shaw had spent eight years in the army, MI5 recruited her. MI5 focuses on counterintelligence and domestic security. Shaw says she left the military on a Friday afternoon, and reported for duty at the intelligence agency on Monday. She worked on covert operations and intelligence gathering, then left the service toward the end of the 1990s. Like many retiring spies, Shaw saw the allure of the private sector—and wanted to leave the government before she was too old to make the transition to corporate work. “I wanted to go on and do other things,” she says. “To get out and get a second career.”
She soon went to work for a private company as a security manager, and before long turned to the private sector to find operatives she could trust. And like Nick No-Name, Emma Shaw found that the market lacked military-grade surveillance expertise, and executives had almost no knowledge of the state of the art in the trade. In 1998 she set up shop as a consultant advising companies on how to hire surveillance operatives. That business eventually developed into “esoteric,” which provides surveillance services to companies and to spy firms.
For a fee, her company tails executives, and provides covert, but legal, video and audio surveillance. It also helps discover and destroy the same devices planted by a company’s opponents. Shaw’s employees offer electronic sweeping services, searching out cameras and listening devices in offices, executives’ homes, and corporate jets and yachts. Esoteric says it can set up microwave-transmission cameras to watch specific locations for long periods of time, allowing the images to be monitored from a remote location. It advertises live vehicle tracking services, which are handy for companies that want to keep covert tabs on the whereabouts of their own sales staffs and vehicles. All her services, she says, are legal. And all of them are expensive. Electronic sweeps of a set of six offices costs between 4,000 and 5,000 pounds sterling. Surveillance costs 1,000 to 1,500 pounds per person per day—with teams that can be nine or ten strong. The costs add up.
Sitting at the conference table in her office, Shaw sounds more like a corporate marketer than a spy. “What we set out to do was provide our services to very high-end corporate organizations,” she explains. In fact, she herself is working on an MBA.
One of the few indications that there’s anything out of the typical corporate experience here is a small trapezoidal white box mounted on the ceiling, with a single blinking green light on the surface. The device, called E-room, was designed and built by Shaw’s team. It monitors radio frequencies inside the room. It sounds an alarm if it detects any unauthorized transmissions. E-Room can also send an e-mail to a designated computer, alerting the user of illicit eavesdropping attempts. Shaw says she knows there are no bugs in a visitor’s briefcase, because if there were any, the E-room system would have identified them already.
Shaw spends her day largely immersed in the ugliest side of the global economy, investigating theft, fraud, insider trading, breach of contract, and harassment on behalf of lawyers and corporate clients. She also handles straight competitive intelligence cases, in which her client is spying on another company to determine its secrets. Shaw says companies use surveillance for “anything where there is either a risk to employees, or a risk to the company or the intellectual property of that company.”
In one case, Shaw’s company went to work for a large research and development company that suspected a member of its senior management was providing details of products to a competitor. Esoteric describes the results in its brochure:
Through the use of a covert tracking device and other surveillance resources, it was established that the director was collating highly confidential product and client information in order to assist him in any future employment, with a long-term view of setting up his own business in direct competition with his current and past employers and selling their products as his own. Although difficult to quantify the potential loss of revenue to the company, had the director successfully stolen products and client information the financial stability of the company would almost certainly have been affected
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In another case Shaw discusses, her company went to work for a real estate development firm at which several employees had recently quit at the same time. The bosses suspected that the departing employees had stolen client lists and client information. What’s more, the company suspected that the former employees were setting up a new business based on those stolen details.
Shaw began surveillance on the former employees with teams following four subjects for six to eight weeks. The surveillance operatives tailed the ex-employees to a printing shop, where one of the employees photocopied site plans. Esoteric’s operative, wearing a baseball cap in which a covert imaging device was embedded, approached the photocopier, getting close enough to take clear pictures—with the camera in his cap—of the site plans that the unwary ex-employee was busy photocopying.
Over the next few weeks, the spies discovered that the ex-employees were visiting potential real estate development sites, that they had leased space, and that they had hired people to work for their fledgling firm. On one day, one of Shaw’s surveillance teams followed an ex-employee to the bank, and using the same camera cap, photographed the bank account manager. The operative moved in to get pictures of the documents on this manager’s desk, images which when enlarged revealed bank account numbers, financial figures, and transaction details. “We can get in quite close,” says Shaw, even in a security-conscious environment like a bank, but “not in all circumstances, not in all banks.”
The team leader phoned the client while the subject was still in the bank, reporting, “This is what’s going on right now. Is this of interest to you?” In hard-fought legal battles, there can be injunctions or prohibitions in place against certain activities. The surveillance team’s client may swing into action in real time to stop the suspicious transaction. In this case, all the details gathered were invaluable information for the client’s lawyers when the ex-employees’ former firm filed suit against their new company for breach of contract.
In every case, a surveillance operation produces a detailed log, in which the operatives note the dates, times, and addresses where surveillance took place. At the end of each day, the team members gather for a debriefing session. They go over the logs to check for any inconsistency, or add details that couldn’t be noted down on the fly. Each operative signs the log with a coded number, and stands ready to serve as a witness in a client’s court case, verifying in court that the activity noted in the report took place. “The client may have a summary report, but if they want it, they have access to and they can have a copy of the surveillance log itself,” says Shaw.
In the cases she describes, Shaw portrays her operatives as coming to the aid of a company that’s been wronged in some way. But she concedes that her firm also works for clients seeking, within the bounds of the law, to do harm to a competitor’s business, typically by ferreting out important information. In such cases, the surveillance isn’t defensive, to preserve the client’s standing in the market; it is offensive—to bring a competitor down.
To her credit, Shaw is unflinching in discussing this less genteel side of her business. Industrywide, she estimates that the division between defensive and offensive intelligence gathering is about fifty-fifty. “Surveillance is a fact of life,” she says. “We’re all recorded I think an average of 300 times a day in the United Kingdom through [closed circuit television].” Indeed, in 2002 one report estimated that Londoners—who live in one of the most surveillance-heavy cities in the world—are monitored every day by more than 500,000 closed-circuit television cameras: about one camera for every fourteen people.2
What’s more, Shaw says, there’s an enormous and growing demand for competitive intelligence in the global economy. “Some companies want to find out what their competitors are doing; everybody does. And I think anybody that says they don’t want to know what their competitors are doing are not actually being truthful about it.” In Shaw’s mind, there’s nothing untoward about using veteran intelligence operatives to spy on the competition. Asked if spying on people’s business lives feels illicit or even creepy to her, she replies, “Generally, no. We deal with very legitimate investigations.”
The limits Shaw puts on herself are broad, but they are definable. Her company won’t do anything illegal, she insists. “If you can observe somebody in public space, in public activity without infringing on their privacy or without going illegally into their premises, by breaking and entering or stealing and things like that, then people will be prepared to do that. There are also people who will be prepared to go that little bit farther and do that breaking and entering, but that’s not something we’re involved in.”
Shaw also restricts her team from placing families of subjects, particularly children, under surveillance. And she insists that if in the course of following a subject her operatives come across information that’s not relevant to the business question at hand—say, if a subject stops off at a hotel for a quick tryst before heading home to his wife—her investigators will not record that information or provide it to their client. “You don’t go recording that person when they’re with their family in their private space; you don’t go trying to put cameras inside their house whilst they’re inside their own home. That’s certainly not the work that we get involved in.” She may have her limits, but not everyone in her industry does.
SOMETIMES, SURVEILLANCE IS used not for business, but for pleasure. In one case, several sources say that a high-living hedge fund executive used a corporate spy firm to conduct intelligence operations against a Hollywood actor. Why did he do it? Reportedly, the hedge fund executive had fallen in love—or lust—with the actor’s model girlfriend.
The financier—who will remain nameless in this account—was up against some steep competition, and he’d need every advantage he could get. The Israeli model who caught his eye was Bar Refaeli, a globe-trotting beauty who was dating the Hollywood actor Leonardo DiCaprio, who had starred in Titanic and The Departed. Soon DiCaprio would become a target of corporate spies, the sources claimed.
Bar Refaeli, the first Israeli model featured in Sports Illustrated’s famous swimsuit issue, was born in 1985 in Hod HaSharon. She began dating DiCaprio soon after she attained stardom, and tabloid reporters reveled in the details when the photogenic couple strolled along Paris’s beautiful Champs-Élysées holding hands.
At the same time, the financier, too, began to take an interest in Refaeli. In late 2005 or early 2006, recalls Bar’s mother and manager, Tzipi Refaeli, the money man met the model, and asked her to lunch. Tzipi says she spent one entire evening at the financier’s side, and came away unimpressed: “He’s nothing to write home about,” she says. She found him shallow and materialistic. “All he can do is buy, buy, buy. Not many people will say no.”
According to her mother—who, like many mothers, may not have all the details—Bar Refaeli is one person who did say no to the financier, rebuffing his romantic overtures and telling him that she’d rather just be friends. Undeterred, the sources claim, he hired a well-known private spy firm to dig up dirt on DiCaprio that could be used to drive a wedge between the actor and the model. Does DiCaprio have any bad habits? Is he sleeping around?
According to one account, the spy firm conducted surveillance on DiCaprio in Cape Town, South Africa, where he was filming the movie Blood Diamond in the spring of 2006. According to another story told by insiders, the spies tried to get photos of DiCaprio with other women during a trip to the Caribbean. The ultimate prize would be a photograph of DiCaprio in the arms of anybody other than Bar Refaeli, which could be leaked to the media or mailed to Bar. Presumably, if she was confronted with evidence of DiCaprio’s treachery, Bar would be more easily lured into the waiting arms of the financier.
It is important to note that one spy in a position to know denied the existence of the project. In any event, the project, if it existed at all, seems to have fizzled, and DiCaprio and Refaeli continued dating until their reported breakup in the spring of 2009. For as
much as two years longer, though, the financier continued to send e-mails to Bar Refaeli, although her mother says she gave up replying to them. “She’s very loyal,” Tzipi Refaeli says. Tzipi says that Bar never received suspicious photographs or other evidence against DiCaprio, and was never aware that the spy team was interested in him. But Tzipi doesn’t doubt the story, either.
“I am not objective,” Tzipi says; but “she is beautiful. She is really a very good girl. She’s pretty, nice, intelligent, young, Jewish, Israeli, and successful. It’s very easy to be in love with her.”
CHAPTER TEN
They’re All Kind of Crazy
A collection of random facts—even random secrets—isn’t worth much unless you can put it together so as to understand what the data tell you about the real world. Beckett Brown faced that problem with the reams of data coming in from its surveillance of Mars, Inc. How do you know what’s important, and what’s not? Which information is going to move markets, or affect the competitive picture?
One company that specializes in the analysis side of the private intelligence business is Verbatim Advisory Group, based in Boston. Verbatim’s squadron of analysts gather information and weave it together to produce what the government calls “actionable intelligence.” The firm’s theory is that investigators need enough data points confirming a thesis before they’ll recommend any action. It’s not enough to have one source telling you something. You want to hear it over and over again from people in the know before you act on it.
In September 2006, four different steel buyers around the world got calls from Verbatim’s analysts. The analysts were fishing for specifics: What’s the Arcelor Mittal steel company up to now? What kind of capacity does it have? And what about pricing? That fall, Arcelor Mittal, a London-based company with roots in India, faced uncomfortably high steel prices—and Verbatim’s analysts wondered what Arcelor would do about this.